Pyrolysis Oil Market Size, Share, Growth, Trends, and Global Industry Analysis: By Feedstock (Plastic, Biomass, Tires, and Mixed Municipal Waste), By Process Type (Slow, Flash, Catalytic, and Microwave), By Application (Heat & Power, Transportation Fuel, and Chemical Feedstock), and Region Forecast 2020-2031

Pyrolysis Oil Market size was valued at US$ 1,837.4 million in 2024 and is expected to reach US$ 3,273.5 million by 2031, growing at a significant CAGR of 8.6% from 2025-2031. Pyrolysis oil, or bio-oil or synthetic crude, is a liquid chemical feedstock and fuel. It is produced by the rapid pyrolysis of tires, plastic, or biomass in the absence of air and results in a dense energy liquid that can substitute for fossil oils as fuel in power, heat generation, transport, or petrochemical use.

Pyrolysis oil market demand worldwide is increasing due to mounting plastic waste challenges, sustainability needs, and regulatory pressure on single-use plastics and greenhouse gas emissions. Governments are also offering incentives like feed-in tariffs and renewable subsidies to support waste-to-energy technology deployment. Corporates and petrochem players alike are also looking for circular feedstock options to contribute to supply chain decarbonization and receive green certifications. But volatility in feedstock quality, compositional variability of pyro-oil, and corrosiveness cause technical problems that often necessitate oil upgrading or proprietary hardware. High capital costs, lengthy permitting periods, and immature supply chains also curtail commercial scale-up. Improvements in digital process control, increased environmental protection laws, and expanding public-private partnerships are beginning to abate these problems, further making this industry increasingly viable.

Facts & Figures 

• Viscosity of wood-derived pyrolysis oil ranges from 35–53 centistokes at 40°C, with water content between 20–30%, affecting combustion behavior
• Fast pyrolysis dominates with ~60% share, producing high liquid yields in seconds at ~500°C
• Hydrotreatment is used to upgrade pyrolysis oil, removing oxygenates and improving stability—accounting for ~45% of upgrading methods
• Bio-oil calorific value ranges from 25–32 MJ/kg, suitable for boilers, turbines, and spark-ignition engines
• Carbon footprint reduction: Pyrolysis oil can cut emissions by up to 90% compared to fossil fuels when used in industrial heating

Key Developments

• In April 2025, Plastic Energy signed a multi-year offtake agreement with a global chemical firm to supply pyrolysis oil produced from hard-to-recycle plastics in Spain.
• In January 2025, Neste announced expansion of its pyrolysis oil production capacity in Finland to meet growing demand from European refineries and chemical processors.
• In March 2025, BASF & Braven Environmental built a solid partnership in Texas under an ISCC PLUS-certified program. BASF will utilize circular pyrolysis oil from Braven’s facility as part of its ChemCycling initiative, advancing recycled content in chemical products.
• In February 2025, Chevron Phillips Chemical & Braven entered a second offtake agreement for Braven’s pyrolysis oil, affirming growing demand from petrochemical manufacturers for certified recycled feedstock and strengthening the market link between advanced recycling and chemical processing.

Pyrolysis Oil Market Segmentation

Based on the feedstock

• Plastic
• Biomass
• Tires and Rubber
• Mixed Municipal Waste

Plastic pyrolysis oil production is growing as governments move to ban single-use plastics and prevent landfill clogging. The subsegment has its sights set on converting hard-to-recycle plastics such as polyethylene, polypropylene, and polystyrene into valuable liquid fuel or chemical industry feedstock. Sorting and pre-treatment are necessary for maintaining consistent oil quality. Technical issues continue to pose obstacles, but advances in catalytic conversion and thermal control are making it more efficient. Plastic pyrolysis bridges the loop on plastic consumption, providing brands with a road to circularity and lower carbon footprint. With growing awareness and policy coordination with technology, the feedstock subsegment of plastic pyrolysis is set to witness strong uptake, especially in urban areas with well-established waste management infrastructure.

Based on the process type

• Slow/Traditional Pyrolysis
• Flash/High-Speed Pyrolysis
• Catalytic Pyrolysis
• Microwave-Assisted Pyrolysis

Of the various types of processes, catalytic pyrolysis has proven to be a top choice because it can enhance oil quality and minimize undesirable byproducts. It employs catalysts to reduce the temperature level of pyrolysis and drive selectively reactions to produce high-quality fuel. The product pyrolysis oil is more stable, contains less oxygen, and less impurities than traditional slow pyrolysis products. Flash pyrolysis, which is another process that is rapidly emerging, is conducted at extremely high heating rates and brief residence times, leading to increased liquid yields and decreased char formation. It is best suited for biomass feedstocks such as agricultural waste and wood chips. Microwave-assisted pyrolysis is also being considered for its energy efficiency and more consistent heating, albeit in initial stages of commercialization. Every type of process has its own special benefit with regard to yield in products, scalability, and use for certain feedstocks, allowing for customized solutions based on local waste streams and energy requirements. With advancing technology and declining cost obstacles, a hybrid process using various pyrolysis processes is also being investigated to achieve optimal output quality and efficiency.

Based on the application

• Heat & Power Generation
• Transportation Fuel
• Chemical Feedstock

Pyrolysis oil's most direct and scalable application is industrial heat and power production. Pyrolysis oil is unlike transport fuel that needs rigorous refining since it can be utilized directly in altered burners, boilers, and Combined Heat and Power  systems. Cement, ceramics, pulp and paper, and food processing industries are embracing pyro-oil to lower reliance on fossil-derived heating fuels. The comparatively straightforward conversion setup and increasing cost competitiveness make this application attractive for small and medium-sized enterprises. While fuel prices are volatile, pyrolysis oil is a more stable, local, and renewable alternative. This application is particularly pertinent in emerging economies where access to stable electricity or clean fuels continues to be a problem.